FAA: THE CURRENT SYSTEM IS UNSUSTAINABLE

A congressional hearing yesterday explored the question of what to do about the ailing Aviation Trust Fund as the House Aviation Subcommittee began to examine options. The Fund, which supports airports and the airspace system as well as FAA operations, is suffering from a dwindling reserve (which could be gone by 2008). The law that authorized the current funding structure, which depends largely on an airline ticket tax, expires in 2007. (The future of the fund beyond that is now under discussion. No decision has yet been made to dissolve it.) “That [ticket-tax] approach will not sustain us into the future,” FAA Administrator Marion Blakey told the panel yesterday. “I see a need for fundamental change.” .…THE FEE FACTOR…“Tying fees to the cost of providing service protects both FAA and the customers who use FAA services,” Blakey said. “We also believe that a cost-based revenue structure would provide incentives to our customers to use limited resources efficiently and to the FAA to operate efficiently, as stakeholder involvement can help us ensure that we are concentrating on services that the customer wants and is willing to pay for.” But, Blakey said, those fees don’t necessarily have to be user fees. “I want to be clear. I am not at this point advocating user fees, or endorsing new excise taxes, or urging debt financing, or seeking a bigger share of the General Fund.”

…AMID SAFETY CONCERNS AND THE “BUREAUCRATIC NIGHTMARE”… Considering that GA represents just 2 percent of the contributions to the Trust Fund, they were pretty well represented at yesterday’s hearing. AOPA President Phil Boyer told the subcommittee that a user-fee system would denigrate safety. “A piecemeal system of fees and charges gives pilots a direct financial incentive to avoid using the safety features and programs provided within the National Airspace System,” he said. National Air Transportation Association (NATA) President James Coyne told the committee that user fees could be more trouble than they’re worth. “A system of user fees could add greater confusion and inefficiency to the air transportation system, cause a bureaucratic nightmare for both government and industry, jeopardize safety, and ultimately result in less revenue,” he said. NBAA President Ed Bolen agreed, saying that the current fuel-tax system is fair and easy to use.

…WHILE NATCA URGES, LEAVE THINGS ALONE Wait a minute…. according to National Air Traffic Controllers Association (NATCA) Executive Vice President Ruth Marlin, there is no crisis in the Aviation Trust Fund. Marlin told the committee yesterday that “we should not underestimate the strength of the current FAA funding system and we should not tamper with it lightly. The Trust Fund is a stable and strong source of revenue. We should keep it that way by rejecting radical changes based on a manufactured ‘crisis.’ … All indicators point to continued and future growth in Trust Fund revenues.” NATCA maintains that the Trust Fund surpluses have provided a valuable source of stability, allowing aviation investment to continue through periods of brief decline.